Doleful Day

When I was not quite three years old, my father, Lieutenant Colonel George Frederick Marshall, I, was killed in World War II, when the U.S. Central Task Force landed at Oran during Operation Torch—the British-American invasion of North Africa. My father died a hero. President Roosevelt posthumously awarded him the Purple Heart along with the nation’s second highest military citation for bravery, the Distinguished Service Cross.

Even though I was too young to remember my father, his love of country and family is apparent in letters, photographs, and memories that were passed on by my mother and others. His courage inspired me to live up to his high standards. I hope, wherever he might be, he will read my work and be aware of my initiative to create an even better America. I hope he will be proud of me, his son, George Frederick “Rick” Marshall, II.

As a tribute to my father in 2013, I dedicated Marshall Memorial Park in Raleigh, North Carolina (www.marshallparknc.com as a way to honor his memory.

When I was five, my mother remarried Robert Middleton Booth, who was my father’s West Point classmate (West Point, 1935) and a career Army officer. Throughout my childhood, teenage, and college years my stepfather was actually my father. He set high, perhaps harsh, standards, and was anything but effusive with his praise. At the time, I smarted under his stern treatment, but I now realize that he motivated me to do whatever I accomplished in my life and prepared me for reality.

When I was a senior in high school, I wrote a paper. This was during the Cold War, so it was trendy and popular to discuss the vast cultural gap between communism and free enterprise. I don’t remember much about my paper’s specifics, but I do remember it painted a dismal picture of reconciliation.

I put a lot of work into my paper and was proud of it. So, because I respected my stepfather as a military officer, who was a troop commander in both World War II and Italy during the Cold War, I was eager to hear his comments. Naturally, I hoped for a compliment.

My stepfather read my work in the time it took him to walk down one flight of stairs. He handed it back to me. He said, “It doesn’t offer a solution. What good is it?” Neither of us said another word. But I was devastated. Fifty years later I still remember that doleful day.

Green Second Lieutenant

My next exposure to the concept of presenting solutions occurred in 1962, when I was a green second lieutenant in the 82nd Airborne Division. The commanding general, another one of my father’s classmates, assembled his junior officers in an auditorium and gave a presentation about the Doctrine of Completed Staff Work. The Army prepared the Doctrine in January 1942 as WWII was ramping up, and released it in 1943, which was, coincidentally, the year my father was killed.

The Doctrine applies to military staff officers, but it is equally relevant to a wide range of non-military situations. It directs staff members to study problems and present solutions in such a format that the commander need only approve or disapprove. Staff members may consult each other, but they may not question the commander. A primary benefit of the Doctrine is that it forces staffers to consider their proposed plan’s flaws. These flaws might not become apparent until a draft of the entire plan is under review. The result is that half-baked ideas are more readily exposed and might not rise to the surface.

Natural Governance Is Born

I was trained to analyze. But not simply analyze and expound. When I discovered flaws, I knew to say, “This is wrong. And this is how it might be fixed.” But there is more: Between high school and the Army, I graduated from Washington & Lee University in Lexington, Virginia. There, a young college professor named John Gunnspurred my lifelong interest in economics.

Combine my stepfather’s curt dismissal of my high school paper and lessons I learned from the Completed Staff Work Doctrine, with my passion for economics, and you will understand how and why my ideas for Natural Governance as a solution to current government ills germinated. Then, they matured.

Real-Life Begins

After receiving an honorable discharge from the Army, my “real-life” education began. In 1964, I started a business with retired Major Robert P. Rupert. We provided services to military bases and large corporations. Occasionally, we employed over 1,000 workers, many of whom earned minimum wage. One particularly challenging contract required feeding a construction camp on the Alaska Pipeline.

Around 1980, I, along with partners, started a business that developed, constructed, and managed federally subsidized housing. We were the primary sponsor of 70 apartment complexes and participated in syndicating (equity fundraising) more than 40 others.

Although our business was financially successful, I was disenchanted with the concept of means-tested welfare and housing subsidies. I was disturbed by how they diminished the work ethic and discouraged traditional American family values. I particularly objected to a Housing and Urban Development (HUD) policy that gave preferences to unwed mothers who could not, or would not, identify their children’s fathers. Because I attempted to run our properties as a business and help people, rather than simply comply with arcane regulations, I encountered frequent disagreements with HUD employees.

Clifton Terrace

In 1983, one of my affiliates purchased Clifton Terrace, a HUD-foreclosed apartment project in inner-city Washington, DC. The property consisted of 285 apartment units in three buildings, and had a troubled history. It was originally built in 1918 as luxury apartments. As time went on, it declined and was purchased by a HUD favored company and rehabbed into low-income housing, all with 100 percent HUD financing. That company failed. HUD foreclosed on the property and sold it by sealed bid. My company was the successful bidder.

As a condition of acquiring the property, I provided a cash deposit of $1 million that assured completion of repairs. HUD returned the deposit a few months later, after it approved the work. The requirement of a substantial cash investment was unusual for HUD property owners. In most cases, the HUD mortgage loan provides almost all the property’s construction or acquisition costs.

From the date of purchase, management recognized vandalism would be a problem, and without tenant support, the property had little chance of success. During the first several months of ownership, my partner, Gordon L Blackwell (now deceased), traveled to the property every Wednesday and met with residents. He discussed what management and residents could do together to improve living conditions, and made strenuous efforts to foster residents’ pride.

Each year, staff members from Raleigh, North Carolina visited the property and hosted Resident Appreciation Day. Volunteers cooked hamburgers and hot dogs for the residents, and I took Polaroid pictures of the children—at the time “Polaroids” were a real novelty. I remember vividly residents and management employees dancing the “Electric Slide” together.

Children were well dressed and parents obviously provided loving attention. When children threw candy wrappers on the ground and managers called it to parents’ attention, the children were instructed to use the trashcans.

I held a meeting with residents and proposed adding a chain-link fence that would protect the property from crime. Residents opposed bitterly, saying it would make their home look like a prison. In response, I proposed and built, at substantial extra cost, an attractive ornamental iron fence. The residents were both appreciative and proud.

Management said “apartment complex” instead of “project,” which has a horrible connotation, and “resident” instead of “tenant.” These seemingly small things made a huge difference in residents’ self-esteem.

Management was a challenge from the outset. This property was located in one of Washington DC’s highest crime rate areas. The property itself was a reputed open-air drug market and suffered from high crime. During a single year, seven murders were committed. That equaled one percent of the murders in the District of Columbia, which at the time suffered one of the highest murder rates in the country. In an attempt to control crime, management hired a succession of guard companies, but their efforts were only marginally successful. Despite all these difficulties, we operated this property successfully for thirteen years.

The property was difficult to maintain for two reasons: tenant abuse and the fact that the buildings were sixty-four years old. Management, via its full time maintenance staff of over twenty people, made every effort to keep the property repaired, but DC inspectors frequently identified maintenance issues.

Elevators were a problem, but management could not find an elevator maintenance company with employees willing to work on the property. So, I hired a retired elevator expert, and started a company for that sole purpose.

I needed a better understanding of management’s difficulties, so I spent a Saturday afternoon and evening at the property and slept on a folding cot in one of the vacant units. Although I didn’t require our manager, Glenn French, to do the same, he joined me.

As we passed a young woman, who was around 18 years old, in one of the hallways, Mr. French said something to her. Whatever it was, she did not like his comment and snapped, “I gets my check.”

As we walked on, I asked Mr. French what she meant. He explained when she first moved in to Clifton Terrace she lived in an overcrowded apartment with her parents and was very frustrated. Then, although she was not married, she became pregnant. The very day she gave birth to her child, she went to the top of the waiting list, and soon moved into her own apartment. “Getting a check” was a status symbol. She went from fighting with her parents to having an apartment of her own. The illegitimate child was her ticket.

That evening we went from guard post to guard post and saw for ourselves what the guards faced every night. Numerous people came and went constantly, so as a practical matter, it was not possible to control access. The property had a population of around 1,000 people, and to limit public entry would have generated resident outrage that would far exceed any benefit. Come to find out, many people who entered and left the property were significant others of residents who did not admit to living on the property, because doing so would result in a rent increase.

During the time I owned the property, the surrounding neighborhood started to gentrify. The new neighbors considered Clifton Terrace an obstacle to neighborhood improvement because it degraded their property values.

Despite its best efforts, management was never able to bring Clifton Terrace up to the level of the properties it had developed itself. Henry Cisneros, then Secretary of HUD, was under pressure because of personal issues. Without prior notice to the owner, Secretary Cisneros held a politically-charged press conference at the property. He bypassed the normal HUD inspection procedures, and publicly declared me to be a slumlord. HUD officials then scheduled two tenant meetings during which they solicited complaints and incited tenant unrest. Rent collections dropped precipitously. (Truthfully, HUD commonly blames others for problems and refuses to acknowledge its own deficiencies.)

Around 1996, HUD then threatened to stop subsidy payments, which was a violation of its own contract. Almost worse, we were not allowed to appeal or even discuss the situation. In response, the property, which was expensive to maintain and dependent on the HUD monthly subsidy payment, filed for Chapter 11 protection. Faced with management difficulties inherent to the property, which were exacerbated by HUD’s interference, I ultimately transferred the property to HUD in full satisfaction of the HUD-held mortgage. At the time of the transfer, the property was in the best physical condition it had been in for years. The limited partnership that owned the property was current in all its financial obligations including debt service and had adequate cash reserves.

One Management, Inc., located in Raleigh, North Carolina, is the affiliated company that managed Clifton Terrace for many years. Jenny Petri, who actively manages One Management, is its current vice president and minority stockholder. I continue as president.

Despite the longstanding antagonism of some HUD officials to me personally, HUD acknowledges that One Management does an excellent job. HUD inspects each property under management at least once a year, and has reviewed the entire management operation of the central office in Raleigh. The company consistently receives high ratings.

My Guilt

I was born in 1940, seventy-five years after Civil War ended. I have one ancestor, my great grandfather, who might have owned slaves. He was from Georgia, which was a slave state. Only a minority of southern whites owned slaves. But even if he owned thousands, beat them unmercifully, raped the women, and ran a breeding farm, I feel no guilt. I never knew him, and I did not participate. His guilt, if indeed he was guilty, is not my guilt.

My guilt is I spent ten years developing and managing housing under federally subsidized programs that rewarded, and therefore encouraged, single motherhood and discouraged the mothers from earning a living. Through these programs, administered under the auspices of HUD, the Farmers Home Administration, local agencies, and combinations thereof, I built, owned, or managed new housing that was available for rent only to people who could document low income. Family income was the measure, so the income of the father (husband) was added to that of the mother (wife).

That seems fairly innocuous. It was not. They were low-income people, for whom every dollar counted. If the father (husband) worked to support his family, his income might make them ineligible for housing—but only if the couple was married and actually reported the income. Reversely, if they did not get married and did not acknowledge the family unit, the only income that counted was the mother’s—often zero. Rent was set at 30 percent of family income. So, even if the “family” qualified, the father’s income (if, and only if, he acknowledged the union) resulted in a 30 percent tax, in addition to all other taxes.

In retrospect, the lesser evil of this system is that it promotes massive fraud—fraud that, because it is perpetrated on a macro and micro level—is virtually impossible to trace or prosecute. The greater evil is that it degrades the institution of marriage and family. In the “upper” classes, marriage survives with difficulty even with all the trappings that insure support from society and provide economic incentives, or at least, the absence of disincentives.

Solutions

Damaging laws and programs are not conceived as damaging laws and programs. They are presented and justified as a way to accomplish objectives that are perceived necessary by legislators, and, on some level, the voting public. For example, means-tested welfare did not originate with the intention of destroying the work ethic. It was enacted to prevent an unacceptable level of poverty. Unfortunately, unintended negative side effects surfaced.

Natural Governance is different. It offers solutions to problems, without perpetuating negative side effects. Natural Governance is NOT about platitudes and exhortations to better behavior. As I learned from my stepfather when I was a teenager, and again from the Army when I was a green young soldier, righting wrongs is about taking tangible actions. Natural Governance does not simply point a finger at government’s failures. It holds out its hand and suggests a better way.
Each topic I discuss offers a concise recommendation. I encourage you, the reader, to consider all recommendations. Then, agree or disagree; evaluate the justification and explanation while testing the discussion against the recommendation.

Natural governance is important to me because I believe it is an opportunity to contribute to the public’s good. Most people of accomplishment do their best work when they are younger. In 2015, the year of this writing, I turned seventy-five. If I have a chance to improve government, this is my last chance.